According to Forrester Research, Inc. (Nasdaq: FORR), the multiregional wide-area network (WAN) services market will grow between 4.5 and 6.5 percent CAGR over the next five years as large multinational corporations replace their aging legacy international data WANs to improve communication application performance between sites. Companies face a difficult time choosing providers as the global telecom services market is still recovering from overcapacity issues of the late 1990s and is evolving due to mergers involving several tier-one network operators, and increased competition from non-telcos — notably, global virtual network operators (VNOs) and specialist systems integrators (SIs). To help enterprises select a primary WAN provider, Forrester evaluated nine of the largest international network operators that offer WAN services in three or more geographic regions.
Forrester estimates that these global network operators comprise nearly half of the total market for multiregional WAN services. Other network operators, such as Telefonica, Singapore Telecoms, and Global Crossing, represent roughly 15 percent of the market. The SIs, VNOs, and global IT outsourcers have about 37 percent of this market. The Forrester Wave™ evaluated the global network operators that have many large and midmarket multinational business customers with a large number of overseas sites, and that also have MPLS points of presence in at least 10 countries outside their home region, including:
- Cable and Wireless
- Infonet (now BT Infonet)
- NTT Communications
Firms interviewed as part of the Wave evaluation told Forrester that consistent delivery of service across geographies was the most important issue in selecting a supplier. Other key vendor differentiators included: service-level agreements (SLAs) with aggressive and proactive penalty credits and good problem escalation and remediation policies, easy-to-understand pricing models, and financial stability.
Overall, Forrester found that Equant, AT&T, and the combined BT/BT Infonet are well-positioned to dominate the global WAN services market over the next five years due to their comprehensive portfolios and extensive reach of multiregional WAN services. Specific results follow:
- Equant is the clear Leader today. For most major evaluation criteria, Equant demonstrated leadership.
- AT&T and the combined BT/BT Infonet are Strong Performers with potential to become Leaders. Forrester expects that when the integration of BT Infonet is completed, BT’s service offering and geographic reach will give strong competition to Equant in many international markets. AT&T also showed a strong performance on breadth of service, service pricing, and its overall value proposition; it is just a short step away from Leader stature.
- MCI, Cable & Wireless, Sprint, and NTT Communications are all firmly positioned as Strong Performers. Most tier-one global network operators will focus their sales and international investments on existing customers and others that have most of their sites within the vendor’s IP backbone footprint. Elsewhere, they will rely mainly on local carrier partners.
- T-Systems is close to moving into the Strong Performer category. To move up, the company will need to enhance its international WAN services portfolio by adding unmanaged MPLS/IP VPNs and hybrid WANs. It also needs to improve its value proposition message for non-German companies.
The research mentioned in this release, “The Forrester Wave™: Global WAN Services, Q2 2005,” also includes recommendations for buyers. It is available to Forrester WholeView 2™ clients and can be found at www.forrester.com.
The Forrester Wave Methodology
The Forrester Wave methodology is open, rigorous, and unbiased. Forrester starts with an open criteria review process, verifies findings against enterprise customer interviews, and checks facts with vendors. This research is performed without sponsorship to help user companies make better vendor selections. Forrester does not charge vendors to participate in a Forrester Wave.